Is Economics Like Gravity?

Certainly, it's responsible for a lot of embarrassing falls.

In the interview with Ross Douthat that I highlighted on Friday, Vice President JD Vance makes the observation that, “the market is a tool, but it is not the purpose of American politics.” This displeased the Wall Street Journal’s editorial page, which dispatched a deputy editor named Matt Hennessey to pen a rebuttal yesterday: JD Vance Is Wrong: The Market Isn’t a ‘Tool.’ Even by the bar that the Journal’s editors keep lowering, Hennessey’s effort is a poor one. But it is valuable to us, insofar as it illustrates well the reasons for the ongoing collapse of the Old Right’s market fundamentalism.

This question of whether the market is an end unto itself or merely a tool—that is, a means to the end of human flourishing—has been at the heart of the intra-conservative debate going back at least to the start of 2019, when Tucker Carlson delivered a monologue heard round the world on Fox News declaring that, “Market capitalism is a tool, like a staple gun or a toaster.” He went on:

Our system was created by human beings for the benefit of human beings. We do not exist to serve markets. Just the opposite. Any economic system that weakens and destroys families is not worth having. A system like that is the enemy of a healthy society.

Internalizing all this will not be easy for Republican leaders. They’ll have to unlearn decades of bumper sticker-talking points and corporate propaganda. They’ll likely lose donors in the process. They’ll be criticized. Libertarians are sure to call any deviation from market fundamentalism a form of socialism.

In November 2019, then-Senator Marco Rubio elaborated on the point in his seminal speech at Catholic University on Common-Good Capitalism, where he said, “our nation does not exist to serve the interests of the market. The market exists to serve our nation and our people.”

Sure enough, as Carlson had predicted, Ambassador Nikki Haley responded in the Wall Street Journal in February 2020 with a warning that “there are those who are pushing a watered-down or hyphenated capitalism, which is the slow path to socialism.” In remarks delivered the same day at the Hudson Institute, she defined “capitalism” as “another word for freedom.” The “critics who call for other kinds of hyphenated capitalism … would merely give government more power over businesses, workers and families. It differs from socialism only in degree.” Senator Pat Toomey delivered a speech the next month at the Heritage Foundation, arguing that “capitalism is nothing more than economic freedom.”

The five years since have seen these issues litigated extensively, and the Journal’s market fundamentalism exposed as a series of dogmatic clichés that have neither theoretical nor empirical support. At this point, Vance’s observation is widely accepted, and the efforts from the other side have become something of a curiosity. As I observed in American Compass’s annual report a couple of years ago, “Every expired political movement has its Japanese soldiers holding out on remote islands, unaware the war has ended or sworn to fight on regardless. The Republican Party has the Wall Street Journal’s editorial board.”

Let’s take a look at what the Journal has left in its depleted ammunition cache. “The idea that markets exploit the weak and release corrosive social forces has always been popular on the left,” Hennessey begins. “The embrace of this view by the right is a more recent development.”

Anyone familiar with the conservative tradition, which apparently does not include the Journal’s editors, would recognize this as a mistake. Of course conservatives have always worried about such corrosive forces.

G.K Chesterton in Three Foes of the Family (1935):

It cannot be too often repeated that what destroyed Family in the modern world was Capitalism. No doubt it might have been Communism, if Communism had ever had a chance, outside the semi-Mongolian wilderness where it actually flourishes. But, so far as we are concerned, what has broken up households, and encourages divorces, and treated the old domestic virtues with more and more open contempt, is the epoch and power of Capitalism. It is Capitalism that has forced a moral feud and a commercial competition between the sexes; that has destroyed the influence of the parent in favor of the influence of the employer; that has driven men from their homes to look for jobs; that has forced them to live near their factories or their firms instead of near their families; and, above all, that has encouraged, for commercial reasons, a parade of publicity and garish novelty, which is in its nature the death of all that was called dignity and modesty by our mothers and fathers.

Robert Nisbet in The Quest for Community (1953):

As Protestantism sought to reassimilate men in the invisible community of God, capitalism sought to reassimilate them in the impersonal and rational framework of the free market. As in Protestantism, the individual, rather than the group, becomes the central unit. But instead of pure faith, individual profit becomes the mainspring of activity. In both spheres there is a manifest decline of custom and tradition and a general disengagement of purpose from the contexts of community.

Wendell Berry in Economy and Pleasure (1988):

And we must be careful to see that the old cultural centers of home and community were made vulnerable to this invasion by their failure as economies. If there is no household or community economy, then family members and neighbors are no longer useful to one another. When people are no longer useful to one another, then the centripetal force of family and community fails, and people fall into dependence on exterior economies and organizations.

Yuval Levin in Putting Parents First (2006):

But markets and families are also in tension with one another. The market values risk-taking and creative destruction that can be very bad for family life, and rewards the lowest common cultural denominator in ways that can undermine traditional morality. Traditional values, on the other hand, discourage the spirit of competition and self-interested ambition essential for free markets to work, and their adherents sometimes seek to enforce codes of conduct that constrain individual freedom. The libertarian and the traditionalist are not natural allies.

Roger Scruton in How To Be a Conservative (2014)

Subsidiarity places an absolute brake upon centralizing powers, by permitting their involvement only when requested. It is the way to reconcile a market economy with the local loyalties and public spirit that it might otherwise erode.

The Wall Street Journal’s editors are of course welcome to disagree with all this. But they cannot invent a reality where it has not been an obvious and necessary dimension of conservative thought. To the contrary, it is the Journal’s own fundamentalism that has no place in the conservative tradition.

Hennessey honors me as “the foremost practitioner of the market-as-religion smear technique,” which indicts “the American right’s ‘blind faith’ in free markets.” But I intend no smear, I’m offering a description of the proudly embraced orthodoxy, as best articulated by Friedrich Hayek in an essay tellingly entitled Why I Am Not a Conservative. “Conservatives,” observes Hayek:

lack the faith in the spontaneous forces of adjustment which makes the liberal accept changes without apprehension, even though he does not know how the necessary adaptations will be brought about. It is, indeed, part of the liberal attitude to assume that, especially in the economic field, the self-regulating forces of the market will somehow bring about the required adjustments to new conditions, although no one can foretell how they will do this in a particular instance.

Indeed, we do. Guilty as charged. Conservatives lack “faith” in “spontaneous” and “self-regulating forces.” Again, the Journal is entitled to its faith, but not to deny the faith-based nature of its doctrine, or to associate that with conservatism.

Writing last year at Law & Liberty, I use the term “market fundamentalism” as a descriptive statement, not a normative judgment:

Its power and resonance come from the truth and depth of the analogy, rare outside the religious context yet so obviously present here. …Its two hallmarks: an insistence on strict adherence to dogma with the attendant commitment to explaining away all evidence to the contrary, and a strong allegiance to an ingroup and policing of an outgroup for insufficient purity. As with any fundamentalism, arguments in this vein have their power—but only in arousing fervor among the believers. Rarely do they persuade, how could they? Fundamentalism demands faith in an inaccessible absolute, it brooks no complexity and offers no opportunity to reason.

Hennessey again does yeoman’s work playing the part. Where Vance notes that “one of the criticisms that I get from the right is that I am insufficiently committed to the capital-M market,” Hennessey responds: “Nobody, not even these editorial pages … capitalizes the ‘M’ in markets.” But he follows this immediately with, “The market isn’t a proper noun, and it also isn’t a tool. The market simply is.”

The market simply is. Surely, dear reader, you see the joke here. One could say “A market simply is.” Or “Markets simply are.” But to declare the existence of a singular market preceded by a definite article, about which one can make universal and absolutist statements, is to use it as a proper noun. “The market simply is” captures precisely the obsessive commitment to the capital-M market that Vance rejects, and precisely the fundamentalism of the worldview—professing original, unpolluted truths that in fact require selective misinterpretation of the sacred texts.

The idea that the market simply “is,” independent of cultural and institutional context, moral custom, and law, is antithetical to conservatism. I won’t drop as many block quotes on you this time, but at least humor me a couple.

Robert Nisbet in The Quest for Community (1953):

Incentives to economic freedom, like those of economic production, are the product not of instincts but of social relationships and of tangible norms and institutions.

Roger Scruton in How To Be a Conservative (2014):

A market can deliver a rational allocation of goods and services only where there is trust between its participants, and trust exists only where people take responsibility for their actions and make themselves accountable to those with whom they deal. In other words, economic order depends on moral order.

This is such an important point that I made it the theme of my first essay when we launched American Compass:

This tunnel vision produces a truncated conception of economic policy’s scope and goals—in the same way that seeing baseball as just people throwing and catching a ball, while often technically accurate, would preclude appreciation of the game and render pointless concepts like a team, league, or commissioner. With “the market” reduced to voluntary exchanges between individuals on a quest to maximize consumption, the role for policymakers shrivels to the task of avoiding interference.

In reality, the market is supported, shaped, and constrained by a variety of essential rules for intellectual property, employment relationships, monopolization, and so on. Its participants are guided in their behavior by vital institutions like schools, labor unions, and the military. Its exchanges, particularly when they operate as investment, proceed to support, shape, and constrain future exchanges. With blinders on, one might eagerly profess what Friedrich Hayek called “faith in the spontaneous forces of adjustment.” Take them off, and it is impossible not to see the social, legal, historical, and institutional scaffolding that buttresses a growing economy, and the role that public policy must play in its construction and maintenance. A protective instinct, and gratitude, for such structures should come naturally to conservatives.

If the Journal made other arguments, I’d address them here, but there aren’t any. It’s just liturgy. Markets “don’t enslave us, they liberate us. … You can’t ignore or wish them away. No amount of political will or spilled ink can overrule them. Supply and demand are undefeated.” For which part do we stand, and when do we touch our hands to our wallets?

In his conclusion, Hennessey writes, markets “are governed by the laws of economics the way the physical world is governed by the laws of gravity.” In one respect, this is a disastrously inapt formulation. Economics is nothing like physics. Its principles are not generated from repeatable experiments, nor do they hold consistently across space and time. Trusting otherwise is a quite literal example of the blind faith and fundamentalism at issue.

But in another sense, I love it. Because yes, the physical world is governed by the laws of gravity. But it is not governed only by the laws of gravity. Indeed, anyone who thought he could reliably predict the motion of bodies with knowledge only of gravity would be something of a moron. Anyone who declared flight impossible would be instantly embarrassed. To understand and operate in the physical world—and to ensure that its outcomes promote human flourishing—requires familiarity with many other laws too, and an enthusiasm for engineered interventions that channel the various forces productively.

Which brings us back to the point of market as tool. Notwithstanding the assigned headline, the Journal never contests Vance’s claim, except with the declarative, “it also isn’t a tool.” Because in the end, there is no response. The idea of the market as an end unto itself has no political constituency, no basis in conservative tradition, and no useful arguments in its favor beyond the navel-gazing libertarianism that has become mostly just a punchline.

Maybe the fundamentalists deserve credit for at least understanding how fundamentalism works. Concede one tenet, and the disillusioned believers will flee. The whole edifice collapses. Better to hold the line in every case, no matter how indefensible. Such conviction can even reinforce the faith. It also leads to impoverishment.

- Oren